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Two Attorneys Settle SEC Fraud Charges

September 17, 2020

Gatekeepers have long been a focus of SEC enforcement. In theory halting those who essentially hold the keys to the markets can help stop a variety of fraudulent schemes. It also leverages the scarce resources of Division of Enforcement which can aid deterrence. A Commission’s manipulation action involving four lawyers and a real estate agency is an example. SEC v. Sargent, Civil Action No. 1:19-cv-114616 (D. Conn.). The action names as defendants attorneys Henry Sargen,…

SEC Actions

Charter School Defrauds Bond Holders

By Thomas Gorman

September 16, 2020

Municipal bonds are sold to fund a variety of local projects. One of the sales features is the local interest. Another can be the tax free income. Thee bonds can thus be a very attractive investment. Critical to the investment is the ability to repay. The necessary information is supposed to be provided to potential investors in the offering documents. If those documents do not have the proper information, as in the Commission’s most recent…

SEC Actions

This Week In Securities Litigation (Week of Sept. 14, 2020)

By Thomas Gorman

September 14, 2020

The CFTC published a first of its kind report this week, warning about the dangers the environment presents to the future of financial stability. Action now by regulators and the private sector, using available legal and financial structures while new ones are created for the future, is critical. Failure may well spell disaster for the economy. The Monetary Authority of Singapore published Guidelines to strengthen a Culture of Responsibility and Ethical Behavior in the Financial…

SEC Actions

USAO, SEC Charge Big Law Attorney with Fraud

By Thomas Gorman

September 11, 2020

Deteriorating economic conditions in the retail market, which began before the current difficult business environment, have only been amplified by the pandemic. As with most situations, the difficulties created for some become opportunities for others. There are always some, unfortunately, who want to make whatever opportunity is available just a bit better for themselves – and often at the expense of others. That is the case for a hedge fund operator who is a former…

SEC Actions

CFTC Report: Effectively Meeting the Challenge of Climate Change

By Thomas Gorman

September 9, 2020

Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy . . . A major concern for regulators is what we don’t know.” This is the message of a report titled Managing Climate Risk in The U.S. Financial System, published by the U.S. Commodity Futures Trading Commission, September 9, 2020 (here). The report was prepared by the Climate-Related Market Risk…

SEC Actions

This Week In Securities Litigation (Week of Sept. 7, 2020)

By Thomas Gorman

September 8, 2020

The Commission closed out the pre-labor day/end of summer period with an array of its staples. Cases were filed based on undisclosed 12b-1 fees (with a notation in the Order that the adviser failed to take advantage of the Share Class Selection offer), offering frauds and unregistered broker sales of securities. Also filed was an action centered on failing to deliver the prospectus after an offering ad a case tied to a pyramid scheme. Finally,…

SEC Actions

Happy Labor Day!

By Thomas Gorman

September 4, 2020

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SEC Actions

A Pyramid-Ponzi Scheme Marketed with Mindfulness

By Thomas Gorman

September 2, 2020

Offering frauds have become the key staple of the Enforcement Division. The focus fits well with the Main Street investor theme frequently cited by the agency. Recently, however, there are indications that the focus may be branching out into pyramid schemes, a variation of the typical offering fraud. The Commission’s latest case in this area seems to combine the two ideas – offering frauds and pyramid schemes — with the popular theme of mindfulness. SEC…

SEC Actions

SEC Settles Binary Options Action with Foreign Nationals

By Thomas Gorman

September 1, 2020

Binary options are either a form of gambling or very risky investments. The characterization depends on who is asked. In the U.S. the options are permitted but viewed as a very high-risk investment. In some countries they are viewed as gambling and banned. When the Commission brings an action centered on binary options, the charges typically center on fraud. That was the focus in a case the agency recently settled that was filed last year.…

SEC Actions

This Week In Securities Litigation (Week of August 31, 2020)

By Thomas Gorman

August 31, 2020

The Commission expanded scope the definition of accredited investor last week, potentially increasing the number of investors who can participate in private offerings. The agency also gave the nod to cryptocurrency exchange INX Ltd., to proceed with a $117 million security token offering, according to the exchange. The Enforcement Division filed a series of actions last week. Those included an FCPA case against dietary supplement giant Herbalife and an action based on a failure to…

SEC Actions

Blog Authors

Two Attorneys Settle SEC Fraud Charges

Charter School Defrauds Bond Holders

This Week In Securities Litigation (Week of Sept. 14, 2020)

USAO, SEC Charge Big Law Attorney with Fraud

CFTC Report: Effectively Meeting the Challenge of Climate Change

This Week In Securities Litigation (Week of Sept. 7, 2020)

Happy Labor Day!

A Pyramid-Ponzi Scheme Marketed with Mindfulness

SEC Settles Binary Options Action with Foreign Nationals

This Week In Securities Litigation (Week of August 31, 2020)

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